I've been a babypipper for a long time now. I admit I haven't been on babypips for a while now. It's good to be back. I have tried numerous strategies, taken numerous courses, did the babypips school of pipology twice (what a gold mine!). Swing trading, day trading, set and forget trading....pretty much the entire spectrum. I've learned a lot as far as what works, what hasn't (at least for me). It took a long while before I got enough courage up to rely on robots to "take the emotion out" of my trading. I have followed a lot of advice on trading over the years, some bad, some worse and some really good as well. I came across a guy out there on the WWW that is selling the sizzle and not the steak.....and after numerous emails, podcasts, interviews, and such... I listened to an interview he did where he was running a simple robot and was doing nearly $1k a day risking a minimal amount. I was intrigued so I took detailed on notes. Bottom line is, what the guy was delivering was a simple plan, using a simple bot and it was working not because the bot was some crazy, 100% winner...but because of the risk ratio, lot sizes and the TP settings. So, I started testing a few of his simple theories on a demo acct, ran some hypothetical numbers, and after I saw consistent growth in the demo acct I decided to toss real money at it. I started on September 3rd of 2016, running one robot on 12-14 pairs. I'm up almost 50% since then.

The key that I found is this: Lot size and TP relative to your account size is CRUCIAL and is the key!

I have since added more money to the account, and as I hit acct size targets I move my TPs and my lot sizes so that my risk ratio remains about the same. But I am letting it grow organically as well. A colleague of mine is less patient and has been tossing a lot of money at it. He is consistently making around $7k a month. I'll get there. It'll take time as I don't have that much free money to toss at this system but a get rich slow system is fine by me.

I'm not selling a product or service (cause I think if you need to make money selling your product rather than just making the money you need FROM your product or strategy then it ain't worth the price) and I'm not trying to push people to any sites for any kind of revenue. I'm just sharing my experience here and what seems to be working. Proof is in the pudding and it is right there on myfxbook.com. I have since tried mixing in other bots as well and what I am finding is that it isn't necessarily the bot that gives you the results. It's your lot size and TP targets that are where people are getting it wrong (which is what I was missing the entire time until now). If there is interest in learning more about this lemme know and I'll spill all that I have learned thus far. I am getting VERY consistent results and, after adding more money, I hope to keep that up with larger TPs and more earnings each week. The other awesome thing about bots is... I don't have to watch charts all day. All of the grunt work has been taken over. I sleep at night, I do some Price Action trading on daily charts in my manual account for fun...but the real consistent breadwinner right now is a simple bot churning and burning for me.

I agree with your observation that the trade-management parameters (position-sizing, targets and SL) are very often where people go wrong. This observation is equally true of both manual and automated trading.

knotthead:

Proof is in the pudding and it is right there on myfxbook.com.

Yes, so far ...

Clearly you've done well with this, and have been profitable for over 3 months and for over 700 trades, and nobody can take that away from you. I hope it continues.

My own main reservations, looking at your figures, are (a) that's you've had a 30% drawdown, and (b) that your average loss is three times the size of your average win, and (c) that your profit is dependent on about an 85% win-rate.

With those parameters, your win-rate would only have to fall from 85% to 75% for the profit also to disappear.

You will perhaps say "Well, that hasn't happened so far, in over 700 trades", and whereas that's perfectly true, the degree of confidence you've so far achieved regarding statistical significance really isn't that high. Yet!

I hope you'll excuse the observation that I wouldn't be putting money into it, myself, on the basis of the figures you're currently showing. I'd want the drawdown to be a lot lower, and/or to see far more figures to assess the statistical significance, before thinking about that. (I appreciate that you're not trying to promote/sell anything, of course.)

I wish you well with it, and will be interested to take a look at it after another 1,500 - 2,000 trades and/or another 6-8 months.

Yes, the drawdown floats between 10-30%. Correct. All systems have some sort of black mark and drawdown is this one. The thing is though, if you are mindful of the drawdown and play conservatively with the system, the drawdown really isn't that bad. The other thing the charts don't tell you is that every "loss" isn't actually a loss. For every losing position there is a tripled position that counters it with a win. For instance, the bot that I run opens a position based on RSI (lets use a lot position of .01 as an example). If it then hits that RSI setting again, the bot opens up a .03 lot size and once the difference between the two lots is where my TP is, it closes both. So if my TP is set to be $2.50, then I can have a loss of $10.00 with my .01 lot size, but my .03 lot size will close at $12.50. So for every "losing" position I have, there is a winner that is larger by my TP. Make sense? That is the only way myfxbook can mark that transation (one win and one loss) but in reality it is a TP.

I have a slew of small profits. I'm in and out quickly for the most part. I have had a handful of large losses, BUT for each of those losses I have had a TP that is my TP larger than the loss. Confusing I know.

For every losing position there is a tripled position that counters it with a win.

Please explain how this system is different to every other martingale system out there?I note on your MFXB link that you have massive exposure to the JPY - 46000 units(not sure what a unit is) but lets pretend that is 0.46 lots. Normally you trade 0.01 lots.....do you see how this has become magnified.....and it is growing exponentially......

Also just another point or two......you deposited $8650 and you have currently $8024 in your account. I guess our definitions of success differ. Balance is totally useless......all that matters is equity.

I think if you need to make money selling your product rather than just making the money you need FROM your product or strategy then it ain't worth the price)

I guess we will have to agree to disagree. In a world where everyone expects everything for free , this is a common view.......

I know how you feel when you have hit the holy grail and suddenly understand why every trader out there is wrong......it happens to me on a regular basis, followed in due course by some schooling from the market. You are going to get some experience soon but don't worry it's a good thing because it is far more valuable than book knowledge.

No difference really since it opens up a larger 2nd trade to counter the first. My point really wasn't about the bot itself but rather the focus on the lot sizes and TP targets vs. the actual bot. I think that if you get a bot that is reliable and fires off often, if your TPs are set low in reference to your acct size and lot size then it will hit the TP often. Rinse and repeat often.

I have deposited $8650. Originally I only plopped in $1k to test the waters. Drawdown was minimal and I was averaging 50-60 trades a week with very small TPs ($1.25 per TP), using lot sizes that only used 2-4% of my account for each position. Again, not saying the bot I am using is a holy grail by any means. My focus has been on a lot of small profits using small lot sizes (relative to my acct size) rather than the glorious "I killed it today with one massive TP!". To keep my risk ratio the same, I adjust my TPs and my lot sizes as my account grows. So an account with $2k in it uses .01 and .03 lot sizes and a TP of $1.25 for each. Once it gets to $4k, the lot sizes move to .02 and .06 with a TP of $2.50. Lot size, TP target, and acct balance has doubled...so it takes roughly the same amount of effort to hit the TP at that level as it did when the acct was at the $2k settings. One thing I have noted is pretty much once the account reaches the next level and the TP targets and lot sizes are moved up, drawdown usually gets larger (as you can see on the myfxbook chart).

So, again. Not saying the bot/system is the holy grail. I'm trying to set up a system where my risk is minimal (relatively speaking - per position) and my TP and lot sizes remain about the same ratio as the acct grows. I just recently up'd my lot sizes and my drawdown just took a hit...so my overall profit is down at the moment. As the acct nears the next level before I move lot sizes and TP targets, the drawdown percentage gets smaller.

"So, again. Not saying the bot/system is the holy grail. I'm trying to set up a system where my risk is minimal (relatively speaking - per position) and my TP and lot sizes remain about the same ratio as the acct grows. I just recently up'd my lot sizes and my drawdown just took a hit...so my overall profit is down at the moment. As the acct nears the next level before I move lot sizes and TP targets, the drawdown percentage gets smaller."

Hi Knotthead.... I am developing a system very similar to yours (with all the same issues) and have just started running one of my own (modified) EA's with micro lot trades (0.02) with a TP of 4 pips and no SL.

Reasoning behind the Bot is my SL's are constantly being hit no matter where they are being placed and I refuse to have my trading behaviour modified by using smaller lots and longer SL positions.

The Good - The Bot basically uses the RSI Indicator. It places a sell every bar above the 55 and buy on every bar below the 35 on the EURUSD 1 minute chart. It was initially successful adding $85 to a $200 demo account within 2 hours... with only $18 drawdown. It uses a hedging strategy to keep the equity relatively equal and avoids using a SL (not advised on live account).

The Bad - if I let this Bot to run for say 12 hours the drawdown would have been unable to be sustained on such a small account as it had generated ~60 open positions and took a profit (~$0.91 - $1.07 slippage...) on another ~80 positions until I hit the "Close All" after a 2 hour period leaving the +$85, which was a great result for my first cBot. The price also appeared to adapt to the hedging method by ranging down the 10 pip middle toward the end of the 2 hours.... adding to my mistrust of broker platforms.

I have some other ideas for Bots which I know would be far more consistent and I prefer to operate on the 5 minute charts with an 11 - 21 pip TP. Micro Lots of 0.02 are one of the keys to this strategy.... finding the other 2 keys is the hard part.

How many pairs are you running? I noted with my setup that I could only run 8-10 pairs at most with a $1k account...as if all positions opened and then added a triple position my draw down would practically get too close (for comfort) to my margin call. With a small account (under $1k) I would definitely go to the smallest micro lot possible (start off at .01) and only run it on 6 pairs or so. Do this in a demo account and see how it does. Obviously demos act a bit different;y than live accounts but at least you'll get a good sense of how your system will perform.

I love the RSI EA idea. The one I run called Kingfisher puts a buy in (5M charts) when the RSI hits the 30 line or lower. Likewise it will put a sell once the RSI (21 bar setting) hits 70 or above. You may be getting a ton of positions firing off because of the tight RSI range you have (55 and 35) and if running a bunch of pairs, yeah your margin will get eaten up and/or you may get a margin call. On demo with a small account size, maybe try 6 pairs with a .01 lot size and see how that does.

if I understand correctly the EA does a 1st order lets say buy EURUSD with lot size 0.01 and a target in pips of 12.5it is is successful it makes 1.25 euros if it is not successful waits for another buy opportunity this time opens with a lot size of 0.03 and sets the target in pipsso that when closing both positions money wise it makes the same 1.25 euros, so in pips the target for the second order could be very large if there is a steep downtrend, or small if the market is in a range

if my assumptions are correct then I see a couple of problems:-for both orders there is no stop loss so in case of a flash crash like it happened to the yen and to the Swiss Franc the account can be wiped out

-Losses can be open for a long time so swap costs can become a burden

-the 2nd trade has a variable take profit in some cases it will be near in some others far and difficult to reach, so it is random bet

If you do a 10 year back test in a couple of pairs I guess you will find some losers open for years?

I guess this system can work for years, maybe decates, but in can blow in 1 minute

if I understand correctly the EA does a 1st order lets say buy EURUSD with lot size 0.01 and a target in pips of 12.5

- No, TP is $1.25 (or currency, not pips however it averages about 10-15 pips for a TP).

it is is successful it makes 1.25 euros

- Yes

if it is not successful waits for another buy opportunity this time opens with a lot size of 0.03 and sets the target in pips

- Sets the same TP but the TP as a whole, so if your .01 lot size gets back to -.50, your TP will be $1.75 (1.75-.50 = $1.25)

so that when closing both positions money wise it makes the same 1.25 euros, so in pips the target for the second order could be very large if there is a steep downtrend, or small if the market is in a range

if my assumptions are correct then I see a couple of problems:-for both orders there is no stop loss so in case of a flash crash like it happened to the yen and to the Swiss Franc the account can be wiped out

-- No, you can't wipe your account out because you are basing your lot sizes according to your acct size. Even if all of your positions go south you have enough margin to cover.

-Losses can be open for a long time so swap costs can become a burden

-- True. I have had a couple of pairs open for a very long time. They tie up some margin but not enough to make a difference. I have one pair GBP/AUD that has been open since September.

-the 2nd trade has a variable take profit in some cases it will be near in some others far and difficult to reach, so it is random bet

--No, the second profit will always make what your TP is set at, regardless of what your first position does.T he thing to remember is your second position is 3 times larger so a .01 might be down 50 pios, but a .03 position only needs to hit about +8 pios to cancel the .01 loss out and make your initial target of $1.25. plus the EA is a reversal/rsi play so the likely hood of it moving 8 pios or so in the reversal direction is high.

If you do a 10 year back test in a couple of pairs I guess you will find some losers open for years?

--probably, no biggie. The other pairs continue to keep churning. They continue to make money and my margin continues to grow. When I get to the next acct level, I up my lots and my TP. If positions are still open they stay open.

I guess this system can work for years, maybe decates, but in can blow in 1 minute

-- Nope. See answers above. It is all about account size and relative lot sizes. I have a 10K account currently and I have 6-7k of margin still available with 12 pairs open. You can see all of my pairs, my entire history, what I have open and what I am making here: https://www.myfxbook.com/members/knotthead/mt4/1832817

I just dumped more money into the account...so my draw down went way down. I raised lot sizes according to my chart though so as positions open up my draw down will rise again. The account is still churning, growing one TP at a time.

I just dumped more money into the account...so my draw down went way down. I raised lot sizes according to my chart though so as positions open up my draw down will rise again. The account is still churning, growing one TP at a time.

I am curious in the case of some pairs that have multiple orders open and are loosing more than 500 pips like GBPAUD,USDJPY,CHFJPY, lets call them "old losers". how/when are you going to close these? I guess these pairs are not opening new orders? and are waiting to reach the original TP? so the price needs to revert back a lot? or do you have a manual procedure for these?

does the new cash that comes into the account affect these "old losers"?the new positions will have larger sizes and larger profits will they pay off the "old losers"? even if the original TP of these "old losers" is never reached

I am curious in the case of some pairs that have multiple orders open and are loosing more than 500 pips like GBPAUD,USDJPY,CHFJPY, lets call them "old losers". how/when are you going to close these? I guess these pairs are not opening new orders? and are waiting to reach the original TP? so the price needs to revert back a lot? or do you have a manual procedure for these?

-- I won't close the old losers. As the account grows they eat up less and less of my margin. I can assess at the end of the year whether I am willing to just close them and take the hit...but why should I? They can stay open as long as they need to until they close. Meanwhile, all of the other pairs continue to churn.

does the new cash that comes into the account affect these "old losers"?

-- only that they draw less against the new balance. As the balance grows my target take profits grow too. So the draw down the old GBP/AUD has has smaller influence as the account grows.

the new positions will have larger sizes and larger profits will they pay off the "old losers"? even if the original TP of these "old losers" is never reached

-- They could. That is my decision whether or not to look at what I have made and be willing to take that hit or not. If I have made $30k in a few months (assuming I have 100K in the account making 9-10% per month) then I'll be more than willing to kill the losers at -$250. Sure. Or I can just keep them open and not take a hit at all until they come back.

Good questions Moongraber! The more info you have the better. This system may not be for everyone. I'm making money and am in the black. My good friend is making about 10K a month at the moment doing the exact same thing.

85% growth since September. I'd call that a success. The draw down has been up to 29%, yes. Currently it is at 17%. As the account grows, the draw down follows (especially when I get to the next level and up my lot sizes). Shortly after I raise lot sizes the draw down goes up a bit, so be it. The thing is...eventually I'll stop upping my lot sizes and start pulling money out. Check out the bottom section of the myfxbook page...you'll see what I am pulling in each month and how that number is growing each month. Again, I am using the profit to grow the account at the moment. Sooner or later that profit the account is making will be coming to my bank account...and the draw down will be about the same.

The grid is a bit crazy because I keep adding more money. As long as the general direction is up and to the right and as long as my lot sizes are small enough compared to my account size to cover a potential 30% draw down... I'm giddy with excitement!